How much should I budget for selling expenses?
Want to know exactly how much you need to budget for selling expenses? Read this and stop guessing.
Quick answer — the number to plan for
Budget 5%–6% of the sale price for most primary homes. For investment properties or houses that need work, plan 8%–10% or more. That range covers real estate commissions, closing/legal fees, staging, small repairs, and moving. Factor capital gains tax separately if the property isn’t your principal residence.
Clear breakdown of common selling expenses
- Real estate commissions: 3%–5% of sale price (combined seller and buyer agent). This is usually the biggest cost.
- Legal/closing costs: $500–$2,000. Includes lawyer/notary fees and final paperwork.
- Staging & photography: $500–$5,000. Proper staging often increases sale price and shortens days on market.
- Pre-sale repairs and improvements: $500–$15,000 depending on condition and market expectations.
- Home inspection (pre-listing): $400–$800 optional but powerful for negotiation.
- Mortgage discharge/penalties: Varies. Check your mortgage terms.
- Moving costs: $500–$3,500.
- Capital gains tax: Relevant for non-primary residences. Calculate with your accountant.
Two simple budgeting formulas
- Fast formula (primary home): Sale price × 0.05 = conservative budget.
- Full protection (investment or fixer): Sale price × 0.08–0.10.
Example: Selling a $800,000 home
- Commissions (4%): $32,000
- Legal fees: $1,000
- Staging & photos: $2,000
- Repairs: $3,000
- Moving: $2,000
Total ≈ $40,000 (5%)
How to cut selling costs without hurting your net proceeds
- Price correctly: Overpricing adds time and hidden costs. A strategic price saves money.
- Negotiate commission smartly: Higher service often beats lower fees. Ask for value, not just a discount.
- Targeted repairs: Spend on visible, high-ROI fixes — paint, curb appeal, minor kitchen/bath touches.
- Use professional photos and targeted marketing to reduce days on market.
- Consider limited-time staging or virtual staging for smaller budgets.
Taxes and financial considerations to plan now
- Principal residence exemption protects most homeowners from capital gains tax. Confirm eligibility with a tax pro.
- If selling an investment property, estimate capital gains and include tax in your budget.
- Track all selling-related expenses — these can reduce taxable capital gains.
Final move — get a tailored number
A one-size estimate gets you close. The right strategy saves tens of thousands. For a precise, no-nonsense budget tailored to your home and market, get a customized cost breakdown and sale plan. Email tony@sousasells.ca or call 416-477-2620 for a clear, written estimate and a plan that protects your profit.
